DOMESTIC claims of other financial corporations (OFCs) grew 8.1 percent in the last quarter of 2022, the Bangko Sentral ng Pilipinas (BSP) reported.
The data showed domestic claims of OFCs rising to P7.86 trillion in the October to December period in 2022 from P7.28 trillion in the same period in 2021.
The OFCs is a comprehensive measure of the claims and liabilities of the OFCs. This refers to institutional units providing financial services other than banks, non-banks with quasi-banking functions, nonstock savings and loan associations, and the central bank.
“The rise in the OFCs’ domestic claims in Q4 2022 was due to their higher claims on depository corporations [DCs], on central government and on other sectors. In particular, the OFCs’ claims on DCs expanded, owing mainly to the growth in the sector’s deposits in banks and holdings of bank-issued equity securities,” BSP said.
“Likewise, the OFCs’ claims on the central government grew on account of increased holdings of government securities. Similarly, the OFCs’ claims on other sectors, particularly the private sector, rose slightly as loans extended to households and nonfinancial corporations increased,” it added.
By component, BSP data showed that claims on other sectors, specifically the private sector, comprised the bulk of the OFCs’ domestic claims during the quarter, followed by claims on DCs and the central government.
The data showed claims on other sectors accounted for 52.1 percent or P4.098 billion in the fourth quarter of 2022. This was followed by claims on depository corporations at 24 percent or P1.89 during the quarter in 2022, and net claims on the central government at 23.9 percent or P1.88 billion during the period.
The BSP also said net foreign assets of OFCs declined by 2.3 percent to P261.1 billion in the fourth quarter of 2022 from P267.3 billion in the same quarter in 2021, as the sector’s liabilities grew faster than its claims on nonresidents.
“The increase in the OFCs’ foreign liabilities was due mainly to higher loans payable to nonresidents. Meanwhile, the growth in foreign claims was primarily on account of increased investments in debt securities issued by nonresidents,” BSP said.
“The expansion in the OFCs’ gross assets was funded mainly by its issuances of shares and other equity to other sectors,” it added.
OFCs, the BSP said, are institutional units of non-money market funds of trust institutions, trust corporations, and investment companies, private and public insurance corporations, holding companies, government-owned or -controlled corporations engaged in financial intermediation, and other financial intermediaries and auxiliaries.
The BSP also stressed that the private sector is composed of other nonfinancial corporations, households and non-profit institutions serving households.
The other nonfinancial corporations refer to private corporations and quasi-corporations whose principal activity is the production of market goods or nonfinancial services.